EXHIBIT 10.8
ELCOTEL, INC.
Employment Agreement of Xxxx X. Xxxxxx
Agreement (this "Agreement") dated as of the 10th day of
December, 1998 by and between Elcotel, Inc. (the "Company") and Xxxx X.
Xxxxxx ("Employee") upon the following terms and conditions:
1. Term: This Agreement shall commence on December 10th,
1998 and shall continue until either party terminates this Agreement by
giving the other party at least 60 days prior written notice or until
sooner terminated as provided in this Agreement.
2. Employment. Employee shall be employed by the Company
and he shall devote his full business time to carrying out the
responsibilities of his position with the Company. Employee's position
with the Company on the date of this Agreement shall be Vice
President/General Manager, IPP Sales.
3. Salary: During the term of this Agreement, the salary
paid to Employee shall not be less than One Hundred Sixteen Thousand
Dollars ($116,000.00) per year plus commissions, and shall be subject to
annual review for merit or other increases in the sole discretion of the
board of directors of the Company. The Employee shall also be entitled
to such sales bonuses and commissions on the basis determined by the
Company ("Sales Commissions").
4. Benefits: Employee shall be entitled to the same
benefits as are made available to the Company's other senior executives
and on the same terms and conditions as such executives (the
"Benefits").
5. Bonuses: Employee shall be entitled to receive such
annual bonus, if any, as the board of directors of the Company or the
Compensation Committee of the board determines or has approved prior to
the date hereof through the Company's Incentive Compensation Plan (the
"Bonus").
6. Stock Options:
(a) Employee shall be eligible for additional stock
option grants to purchase shares of the Company's common stock pursuant
to the Company's stock option plans. Employee shall retain all options
previously granted and unexercised.
(b) All of Employee's stock options shall immediately
vest in their entirety in the event of a Change of Control (as defined
below). In addition, in the event of a termination by the Company of
Employee's employment (including by 60 days prior written notice pursuant
to Section 1) other than for Cause (in accordance with Section 9(a) of
this Agreement) or upon the death or disability of Employee (in
accordance with Section 9(d) of this Agreement), all of Employee's
employee stock options shall continue in effect for 30 days after the
effective date of such termination except that (x) for all options
granted after the date of this Agreement and for all other existing
options that can be amended without increasing the exercise price in
order to maintain incentive stock option status for federal income tax
purposes, shall continue in effect until the termination of such option
in accordance with its terms absent any termination of employment but not
to exceed one year from the date of termination of employment and (y) for
all options to which (x) does not apply, shall, if not exercised within
such 30 day period, be automatically extended until the termination of
such option in accordance with its terms absent any termination of
employment but not to exceed one year from the date of termination of
employment.
(c) The occurrence of any one or more of the following
events shall be deemed to be a "Change of Control":
(i) If any transaction occurs whereby
substantially all of the assets of the Company are transferred,
exchanged or sold to a non-affiliated third party other than in the
ordinary course of business;
(ii) If a merger or consolidation involving the
Company occurs and the stockholders of the Company immediately
before such merger or consolidation do not own immediately after
such merger or consolidation at least fifty percent (50%) of the
outstanding common stock of the surviving entity or the entity into
which the common stock of the Company is converted; or
(iii) If any person (including, without limitation,
any individual, partnership or corporation), other than Fundamental
Management Corporation and its affiliates or other than Wexford
Management LLC and its affiliates, becomes the owner, directly or
indirectly, of securities of the Company or its successor (or a
parent company thereof) representing thirty-five (35%) or more of
the combined voting power of the Company's or its successor's (or a
parent's, as the case may be) securities then outstanding.
7. Business Expenses: Employee shall be reimbursed (in
accordance with Company policy from time to time in effect) for all
reasonable business expenses incurred by him in the performance of his
duties.
8. Indemnification: Employee shall be indemnified by the
Company with respect to claims made against him as an officer and/or
employee of the Company and as an officer and/or employee of any
subsidiary of the Company to the fullest extent permitted by the
Company's certificate of incorporation, by-laws and the General
Corporation Law of the State of Delaware.
9. Termination By the Company: Employee's employment may
be terminated by the Company only as provided below:
(a) For Cause: For Cause (as defined below) by
written notice to Employee and payment to him of salary and Sales
Commissions accrued, but not paid through the date of termination;
provided however -
(i) If the nature of such Cause involves
dishonesty, fraud or serious moral turpitude, such termination
shall be effective upon the giving of such notice.
(ii) If the nature of such Cause does not involve
dishonesty, fraud or serious moral turpitude, such termination
shall be effective upon the expiration of thirty (30) days after
the giving of such notice unless within such thirty-day period,
Employee has cured the basis of such Cause, or if a cure is not
possible within a thirty-day period, if he has diligently and in
good faith commenced to effect such cure.
(b) Without Cause: Without Cause by prior written
notice of termination given to Employee and by compliance with the
following:
(i) The Company shall pay to Employee his salary
and Sales Commissions accrued, but not paid through the date of
termination and shall pay to Employee his salary and provide, at
the Company's expense, the Benefits (excluding participation in the
Company's 401(k) plan and any other benefits to which COBRA does
not apply for a period of (x) six months from the date of
termination of employment and thereafter (y) until such date that
the Employee locates employment comparable to his employment with
the Company at the date of termination of employment but not beyond
the date that is twelve months from the date of termination of
employment. If the Employee's employment is terminated without
Cause during a fiscal year effective on a date that is on or after
6 months after the beginning of such fiscal year, then the Company
shall pay to Employee in a lump sum within 30 days after the
termination of employment the Pro Rata portion of the Employee's
bonus from the Company with respect to the fiscal year prior to the
termination of employment; provided however with respect to a
termination of employment without Cause that is effective during
the fiscal year ending March 31, 1999, the Company shall pay to
Employee on or before June 30, 1999 the Pro Rata portion of the
Employee's bonus from the Company with respect to the fiscal year
ending March 31, 1999, such bonus (but not the Pro Rata portion
thereof) shall be calculated as if he had been employed through the
end of such fiscal year. Pro Rata shall mean the number of days
from the beginning of the Company's fiscal year during which the
termination of employment occurred up to and including the date of
termination of employment divided by 365 days.
